"What you are highlighting is a significant abuse in the industry," acknowledges William Weinstein, a former chief executive of B-Line and a pioneer in the debt-buying business.

Speaking generally and not about his former company, he confirms that some lenders and debt buyers simply hound consumers to pay debts that have been canceled, while others refrain from informing consumer credit bureaus when debts are eliminated.
"The failure to accurately update credit reporting has allowed unscrupulous activity to prosper," says Weinstein.
He left B-Line last year after it was purchased by Lone Star for an undisclosed sum, a departure marked by now-settled litigation between Weinstein and his former company.
B-Line's current president, Rui Pinto-Cardoso, says the firm doesn't engage in the practices Weinstein describes.

...

B-Line's former CEO, Weinstein, who started the company in 1997, takes credit for helping build the market for Chapter 7 debt.
Even debt initially designated as discharged can bring legitimate returns, he says.
In some cases, bankruptcy courts discover that Chapter 7 debtors have additional assets, which are then divided among creditors.
Other Chapter 7 cases are moved to Chapter 13 or dismissed altogether, making debts potentially collectible.
In a tiny fraction of cases, people repay discharged debts out of a sense of moral duty.

Increased competition recently in the bankruptcy-paper market has driven up the price of discharged debt—from 1/20th of a cent on the dollar to 3/20ths, or higher—and that has helped spur more aggressive collection tactics, Weinstein says.
He says he hasn't participated in any improper conduct.

"What you are highlighting is a significant abuse in the industry," acknowledges William Weinstein, a former chief executive of B-Line and a pioneer in the debt-buying business.

Speaking generally and not about his former company, he confirms that some lenders and debt buyers simply hound consumers to pay debts that have been canceled, while others refrain from informing consumer credit bureaus when debts are eliminated.
"The failure to accurately update credit reporting has allowed unscrupulous activity to prosper," says Weinstein.
He left B-Line last year after it was purchased by Lone Star for an undisclosed sum, a departure marked by now-settled litigation between Weinstein and his former company.
B-Line's current president, Rui Pinto-Cardoso, says the firm doesn't engage in the practices Weinstein describes.

...

B-Line's former CEO, Weinstein, who started the company in 1997, takes credit for helping build the market for Chapter 7 debt.
Even debt initially designated as discharged can bring legitimate returns, he says.
In some cases, bankruptcy courts discover that Chapter 7 debtors have additional assets, which are then divided among creditors.
Other Chapter 7 cases are moved to Chapter 13 or dismissed altogether, making debts potentially collectible.
In a tiny fraction of cases, people repay discharged debts out of a sense of moral duty.

Increased competition recently in the bankruptcy-paper market has driven up the price of discharged debt-from 1/20th of a cent on the dollar to 3/20ths, or higher-and that has helped spur more aggressive collection tactics, Weinstein says.
He says he hasn't participated in any improper conduct.

Lone Star acquired 100 percent of B-Line's equity from Golden Gate Capital, which acquired its stake in the company in 2003, B-Line's founder Bill Weinstein, who will be leaving the company, and other minority investors.

The cards, born a decade ago, are gaining new momentum as debt-collection firms look for new ways to collect, said William Weinstein, chief executive of Weinstein & Riley, a Seattle debt collector.

...

William Weinstein, chief executive of Weinstein & Riley, a debt-collection company in Seattle, said he proceeds carefully when buying bankruptcy-related debt because some firms "aggressively pursue payments in violation of the law."

William S. Weinstein, founding director of Weinstein & Riley, P.S., one of the largest national law firms focusing on the representation of creditors in bankruptcy, has lectured extensively on creditors rights and bankruptcy.